One of the city’s biggest developers says downtown Lawrence is in crisis

Editor

Eight years ago, there was a certain amount of angst surrounding the construction of the seven-story building that Doug Compton now surveys downtown from via a corner office perch.

Compton, one of the largest developers and property owners in Lawrence, was leading the group to build the 901 New Hampshire building, the first of what would become a trio of new highrises — by Lawrence standards anyway — near Ninth and New Hampshire streets.

“When we broke ground on this building, I think there were about 10 empty buildings on Massachusetts Street,” Compton told me in a recent interview. “I know one of the concerns of Intrust Bank (the project’s financier) was they couldn’t believe we were breaking ground on this building when there were that many vacancies.

“But we did because we thought we would help downtown by bringing more business downtown.”

Success did come. A new hotel, some new retail and, for good measure, a couple of companies — Compton’s First Management and Treanor Architects — moved their headquarters downtown. Perhaps most importantly, more than 200 people are now living in apartments Compton has built along New Hampshire Street.

Good times wear off, though. The Journal-World recently reported that Massachusetts Street had 16 vacancies. While vacancy rates have always been cyclical in downtown, Compton said people who think this is a temporary blip that will work itself out do so at their own peril.

“Am I concerned?” Compton asks during the interview. “I am more than concerned.”

He continues to think back to that 2010 groundbreaking when 10 vacancies were causing a bit of a panic. The difference between now and then, he said, is more than just numerical. Today, Compton isn’t confident that there is any project on the horizon that is going to give downtown another boost. He’s also not confident community leaders have a vision for what they would even want that project to be.

“This might be a situation where I have to be patient and wait,” Compton said. “But there is a crisis in downtown Lawrence, and if the City Commission doesn’t understand there is a crisis in downtown Lawrence, that is a problem.”

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Make no mistake, though, Compton has some ideas about what could give downtown a boost. He’s actively working to get City Hall approvals for a grocery store project at Seventh and New Hampshire streets, on the former Borders bookstore site.

It is uncertain whether city commissioners will approve the tax incentives that Compton says are vital for the project. Several times during the interview, Compton expressed amazement that more than three years has passed since he started on the grocery project.

“We actually thought that was going to be our easiest project,” Compton said.

The far bigger boost, Compton thinks, would come from the property just down the block from the grocery store project.

“The mother ship, in my personal opinion, in all of downtown Lawrence is the one we walked away from a few months ago, and that was the Journal-World site,” Compton said.

For several years, Compton and Lawrence businessman Mike Treanor have been working to redevelop the former Journal-World printing plant that stretches along Sixth Street between New Hampshire and Massachusetts streets into a mixed-use project that would feature a conference center, a hotel, condos and a plaza area.

Conference centers, though, frequently receive public subsidies in other communities. That idea has been a nonstarter in Lawrence. City Manager Tom Markus has expressed concern about the city running a conference center, and several city commissioners ran on platforms that were critical of incentives.

In truth, the project has never gotten much momentum at City Hall, and after holding an option to purchase the property for several years, Compton allowed that option to expire recently. The property, which is owned by the former owners of the Journal-World but is in no way connected to the newspaper’s current ownership, is back on the market.

Without that project, Compton doesn’t see what will provide a boost to downtown. He was counting on the conference center to bring more events to downtown, the condos to bring more residents to downtown, and the plaza area to be a new reason for Lawrence residents to come back to downtown. The plaza, he said, would have been about the size of the outdoor gathering area in the Power & Light District in downtown Kansas City.

“It could have been anywhere from a $125 million to $225 million project,” Compton said of the total development. “To me, what was going to save downtown and make downtown even be better for so many years to come was the redevelopment of the Journal-World site. You can’t tell me that development wouldn’t do great things for downtown.”

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Presumably, the conference center project could be put on Compton’s front burner again, if he sensed city officials were ready to have a serious discussion about subsidies. So, that raises a question of whether Compton really sees downtown’s situation as dire as he’s stated, or whether he is using the downturn in an attempt to create some urgency with City Hall leaders.

There’s really no way for me to ascertain that, but Compton insists he’s genuinely concerned. Compton, who now splits his time between residences in Lawrence and Chicago, said he recently spent what should have been some of his free time in the Chicago area at a Midwest franchise convention.

“I never used to do that stuff before, but I’m doing it now because I have a lot of empty buildings,” he said.

Compton said others may share his concerns about downtown if they were privy to some of the struggles that downtown businesses are facing.

“If you knew the ones on the fence, I can tell you it could get worse before it gets better,” Compton said.

In talking with downtown retailers, I often hear about two particular challenges. Lawrence residents don’t spend enough time downtown, and downtown rents have become very difficult for small businesses to pay.

Compton agrees with both sentiments, to a degree. That may cause some Lawrence folks to howl because they believe Compton has exacerbated both of those issues.

Compton said he believes many Lawrence residents do treat downtown as a destination type of place. You go there for the birthday dinner but not your regular Friday night out or weekly shopping needs. He said new developments in both south and west Lawrence have given Lawrence residents more options for everyday needs. Compton has been a major player in west Lawrence development. He is part of the group that has the Bauer Farm retail property, which is near the Walmart development that he also led.

Compton expressed no regrets about those developments — other areas of the community besides downtown also need to prosper — and he notes the city has done perhaps more than anyone to spur the west Lawrence growth. He said business activity has picked up significantly since the city decided to invest millions in northwest Lawrence by building the Rock Chalk Park sports complex.

The city, he said, needs to do more to embrace the idea of downtown as a destination. That’s where a conference center and a plaza that could host a multitude of events would come in handy, he notes.

On the rent front, Compton knows many blame him for the increase in rents. He’s likely the largest landlord in downtown. He thinks that blame is misguided. Rents are dictated by how much he has to pay for a building. Buying a building cheaply in downtown Lawrence isn’t easy. For one, the supply in downtown is always constrained. The boundaries of downtown haven’t changed for decades. Two, many longtime retailers who are lucky enough to own their buildings don’t look at them just as a real estate investment. Often, the building is their entire retirement plan, Compton said. That doesn’t make for easy negotiations.

Compton notes that he would buy buildings for less if he could.

“Don’t you think?” he says. “It would be to my advantage to buy them for less.”

Compton, perhaps, could drive the market downward by walking away from more deals. Despite the price pressures, he has continued to be a buyer in downtown. Compton told me he has walked away from plenty of deals, and he’s not sure he has that type of power on the market anymore. The number of willing buyers in downtown has expanded significantly, he said. There are now rich Kansas City individuals, for example, who are looking to make one-off purchases of downtown buildings. They might be able to put their college-age children in an upstairs apartment and have the thrill of saying they own a piece of downtown Lawrence. If they break even on the deal, that is good enough for them.

Plus, Compton said he doesn’t want to walk away from downtown. He wants to make it better. He made that decision back in 2010 when he broke ground on the 901 New Hampshire building.

“We stand behind our commitment to keep downtown viable,” Compton said. “We just need a little help from the city.”

The city recently hired a consultant to help create a new master plan for downtown Lawrence. It will include a city committee to guide the process. Compton said he would like to be on it but hasn’t yet been approached about it.

Compton, who once served on the City Commission, knows those plans can be meaningful. He knows the mindset of the City Commission can be even more so.

“I’m a developer, and that means change,” Compton said. “I think we have a City Commission that doesn’t like change very much.”

As in 2010, it seems Compton is signaling he’s willing to get engaged in promoting some downtown change. History suggests everyone should pay attention.

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